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https://developer.mozilla.org/en-US/docs/Web/Privacy/Privacy_sandbox/Partitioned_cookies

CHIPS is similar to the state partitioning mechanism implemented by Firefox. The difference is that state partitioning partitions cookie storage and retrieval into separate cookie jars for each top-level site, without a mechanism to allow opt-in to third-party cookies if desired. As browsers start to phase out third-party cookie usage, there are still valid, non-tracking uses of third-party cookies that need to be permitted while developers begin to handle this change.

so this adds a setting to allow a site access to shared 3rd party cookies, when the site supports the feature?

You can embed bits of a website in other websites, that's how 3rd party cookies exist